BP slashes dividend in half after record $6.7 billion Q2 loss

BP has cut its prized investor dividend in half after reporting a record US$6.7 billion loss in the second quarter of the year, when the COVID-19 pandemic destroyed fuel demand and oil prices.

On Tuesday, the British oil major announced that it will “reset” its shareholder payout from 10.5 cents a share to 5.25 cents a share, in the first cut to its dividend in a decade.

BP also outlined plans to reduce its oil and gas output by 2030 in favour of renewable power generation, under new CEO Bernard Looney’s strategy to “reinvent” the company in line with a global transition to low carbon energy.

The energy giant said it would increase its low carbon spending by 2030 to $5 billion a year, shrink its oil and gas production by 40% compared with 2019 and boost its renewable power generation to 50GW.

Underlying replacement cost loss for the quarter was $6.7 billion, a big swing into the red when considering BP’s profit was $2.8 billion in the same period a year earlier. The heavy loss was mainly down to the firm’s decision to wipe $6.5 billion off the value of its oil and gas exploration assets.

“These headline results have been driven by another very challenging quarter, but also by the deliberate steps we have taken as we continue to re-imagine energy and reinvent BP,” said Looney in a statement.